Progressive Grocer

JAN 2017

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102 | Progressive Grocer | Ahead of What's Next | January 2017 Technology In-store Solutions Future in the Physical Investing in cutting-edge in-store technology can be in- timidating for grocers, especially when many are focusing more on e-commerce expansion as part of an omnichannel survival strategy. It should never be overlooked, however. Although digital retail is capturing headlines, physical stores remain critical, according to "On Solid Ground: Brick- and-Mortar Is the Foundation of Omnichannel Retailing," a July 2014 report from Chicago-based consultancy A.T. Kearney. Some 90 percent of all retail sales are transacted in stores, and 95 percent of them are captured by retailers with a brick-and-mortar presence. "Stores provide consumers with a sensory experience that allows them to touch and feel products, immerse in brand experiences, and engage with sales associates who provide tips and reaffirm shopper enthusiasm for their new purchases," A.T. Kearney says. Additionally, two-thirds of consumers who purchase online use the store before or after their transactions. In these cases, the store makes a significant contribution to converting the sale, even though the transaction eventually is registered online. "The debate should not be a question of digital or physi- cal," A.T. Kearney notes. "Successful retailers understand how each customer touchpoint adds value … and develop omnichannel strategies — with stores as the foundation — that maximize customer satisfaction with profitability." —Randy Hofbauer Retailers should first ask the question, 'Does this technology make shopping easier for my customers, or is this technology for technology's sake?'" —Mark Heckman, Consultant about the ability to highlight a product at shelf when a user has identified it as an item on their list, when the con- sumer nears that shelf location. ese experiences are being experimented with today." According to Digital Social Retail's Stone, beacons enable retailers to do the following: Track the location of customers as they enter the store, browse and complete their shopping See what aisles customers are spending the most time in while in the store Understand how many customers open the push notifications, redeem coupons or sign up for loyalty reward programs Conduct customer surveys to instantly obtain valuable customer feedback and data on their shopping experience Moving Forward Obviously, there are plenty of grocery stores without any of these new in-store technologies. What's the thinking of these retailers? Why don't they invest? "Many grocery stores may not be employing this type of technology yet due to a lack of understand- ing of how beacons or digital signage can increase store revenue and foot traffic," Stone suggests. "Pushing coupons directly to a consumer's mobile device can increase impulse buys by 19 percent, says Nielsen Media Research." Consultant Mark Heckman believes that retailer reluctance can be traced to the nature of the technol- ogy. For example, non-customer-facing technology that works behind the scenes to reduce out-of-stocks, shorten checkout lines, and better manage merchan- dising and inventory isn't optional for long-term success. Retailers must invest in these to compete. "But customer-facing technology such as in- store touchscreens and the emerging locational targeting technology of beacons and WiFi are another story," he's quick to add. "Retailers should first ask the question, 'Does this technology make shopping easier for my customers, or is this tech- nology for technology's sake?'" VideoMining's Sharma surmises that some retailers are naturally cautious about investing in technologies that are as yet unproven. at could be a mistake, however. "I do think they should invest in new in-store technologies, because it would be a huge competi- tive disadvantage to be a slow adapter," he cautions, "especially as the younger generation of shoppers come into their stores expecting access to some of the new technologies and applications that they see and use in other stores and channels. "Grocery stores are now beginning to feel the impact of competition from online retailers," con- tinues Sharma. "In-store digital technologies pro- vide new ways to begin to counter those challenges, along with good omnichannel strategies." PG s TR i P M inin G Ways to get shoppers out of the store more quickly include paying for groceries from a hand-held device.

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